Incomplete healing of critical size bone defects, including defects of the craniofacial skeleton, are common. Osteogenic proteins, including bone morphogenetic protein 2 and 4 (BMP2, BMP4), promote bone healing, but the proteins have short half-lives and are rapidly cleared by the bloodstream, which limits their utility. The goals f our previous work were to develop gene therapy and tissue engineering approaches to efficiently deliver osteogenic proteins and improve bone healing using muscle-derived stem cells (MDSCs). We have shown that murine and human MDSCs (hMDSCs) genetically engineered to express BMP2 or 4 could differentiate toward an osteogenic lineage and improve bone healing in calvarial and long bone defects. We also found that concomitant gene delivery of vascular endothelial growth factor (VEGF) improves bone healing after the implantation of BMP2 or 4 expressing MDSCs. Similarly, we have reported that MDSCs isolated from mouse and human skeletal muscle were also capable of chondrogenic differentiation and could be used to promote articular cartilage repair after acute injury (osteochondral defects) and disease (osteoarthritis [OA]), especially when genetically modified to express bone morphogenetic protein 4 (BMP4-MDSC). However, in contrast to bone, our findings also suggested that genetic modification of MDSCs to express both BMP4 and the angiogenic antagonist sFlt-1, could accelerate the AC repair capacity of the cells supporting the fact that blocking angiogenesis is beneficial for AC repair. Although we have made substantial progress in muscle stem cell based therapy for bone and AC healing over the past number of years, most of our previous work involved genetic modification of the stem cells prior to transplantation, a step that limits te clinical translation of the work. We therefore propose a new set of experiments which will aim to circumvent the necessity of using viral transduction via the use of a novel heparin-polycation coacervate delivery system capable of slowly releasing the required therapeutic proteins including BMP2, VEGF and/or sFlt-1 to promote bone and AC repair in conjunction with non- transduced MDSCs. In the first set of experiments we will utilize the heparin-polycation coacervate delivery system to deliver BMP2 and VEGF to enhance hMDSC mediated bone repair. The second set of experiment will aim to promote AC repair after the induction of OA utilizing the heparin-polycation coacervate delivery system to slowly release BMP2 and sFlt-1, in combination with hMDSCs, to enhance AC repair. The efficiency of bone and AC repair with the coacervate-hMDSCs technology will be compared to both hMDSC based gene therapy and hMDSC based free protein therapy (i.e. without the use of the heparin-polycation coacervate). This application outlines a new area of research designed to offer valuable clinically relevant approaches based on novel bioengineering concepts for the treatment of musculoskeletal tissues following injury and disease.